Brazil’s Petrobras Reports Nearly $17 Billion in Asset and Corruption Charges

April 23, 2015

Paul Kiernan – The Wall Street Journal, 4/22/2015

Brazil’s state oil company Petróleo Brasileiro SA put a price tag on a corruption scandal that has thrown the country into political and economic turmoil, writing off $17 billion due to losses from graft and overvalued assets.

The disclosures were part of the first audited financial statements released by Petrobras in more than eight months.

Brazilian federal prosecutors since last year have been investigating allegations that the company’s suppliers conspired to overcharge Petrobras for major projects, funneling some of the illicit profit to former Petrobras executives and politicians in the form of bribes and illegal political donations.

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An escalating corruption scandal rocks Brazil

April 14, 2015

Mary Anastasia O’Grady – The Wall Street Journal, 04/15/2015

Former Brazilian presidential candidate Aécio Neves speaks for a lot of his compatriots when he says President Dilma Rousseff’s Workers’ Party (PT) used stolen funds to defeat him in Brazil’s runoff presidential election in October.

In an interview in Lima last month I asked Mr. Neves—who is president of the Social Democracy Party of Brazil (PSDB)—whether he lost the election because the socialism of the hard-left Ms. Rousseff had greater appeal to Brazilians than his more market-oriented platform.

He denied the possibility. He lost, he told me, because of “organized crime.”

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Political theatrics that are dividing Brazil

April 7, 2015

Otavio Frias Filho – Financial Times, 4/5/2015

To watch the political theatre now unfolding in Brazil is to behold a country licked by discontent and scandal. An economy that had already been drifting for years is now in recession, and inflation is on the rise. Dilma Rousseff, narrowly re-elected to the presidency late last year, has had little choice but to renege on campaign promises and resort to harsh austerity.

While spending cuts are a necessary corrective to the fiscal complacency of her first term, many accuse Ms Rousseff of deception. They are embittered, too, by allegations of multibillion dollar kickbacks connected to Petrobras. No evidence has emerged to implicate Ms Rousseff, who as minister of mines and energy headed the Brazilian state-owned oil company’s board of directors when much of the corruption is said to have occurred. Still, large crowds of protesters gathered across the country last month, calling for her to be impeached.

Brazil is one of the few democracies to have removed a sitting president before (Fernando Collor was turfed out of office in 1992). Lawmakers may be tempted to unsheathe their daggers once again. As recently as December, fewer than a quarter of Brazilians disapproved of Ms Rousseff’s administration. Now the figure is over half.

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On Black Women and Feminism in Brazil

April 7, 2015

Bianca Santana – Huffington Post, 4/6/2015

Gender, race and class are all intimately intertwined in Brazil. Using the needs of black women as my starting point, I’ll try to draft an overview, however simplified, of the disparities within Brazilian feminism.

Brazil has over 200 million people, of which 50 percent are women. Though our president is a woman, running for reelection against another woman, we are still underrepresented in politics. In our House of Representatives, less than 9 percent of the deputies are women.

Fifty percent of all Brazilian women are black, which means there are 50 million black women in the country — 10 times the population of Norway.

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Brazil’s Rousseff navigates troubles at home as she ponders a U.S. visit

April 6, 2015

Vinod Sreeharsha – McClatchyDC, 04/01/2015

Brazilian President Dilma Rousseff is expected to meet President Barack Obama next week when the Western Hemisphere’s leaders gather for the Summit of the Americas in Panama, in what will be Rousseff’s highest-profile encounter with Obama since revelations last year that the National Security Agency had spied on her.

Made public in the documents leaked by fugitive former NSA contractor Edward Snowden, the spying revelation led to the cancellation of a planned Rousseff visit to Washington, and she’s expected to respond next week to an invitation from the White House to reschedule the trip.

Yet tense relations with the Obama administration are nothing compared with what Rousseff faces at home: two years of virtually no economic growth, a currency that’s plunged 18 percent against the dollar just since Jan. 2, a major corruption scandal and loud calls for her resignation or impeachment. In just the third month of her second four-year term, her approval rating is 13 percent, according to the Brazilian pollster Datafolha, after she won 52 percent of the vote last fall.

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Experts give their prescriptions for Brazil as the commodity boom ends

March 27, 2015

Joe Leahy – Financial Times, 3/25/2015

Brazil’s economy has slowed sharply. The brakes were applied by the end of the commodity supercycle that occurred in the first decade of the 21st century combined with rapid credit growth.

The debate in Brazil has returned to the vexed question of how to make one of the world’s most inward-looking economies more competitive.

The answer lies in improving education, streamlining taxation, simplifying bureaucracy in general, and fixing infrastructure. But beneath these concepts are complex questions that run as deep as Brazilian politics and culture itself.

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What Investors Think About Brazil Political & Currency Risk

March 27, 2015

Kenneth Rapoza – Forbes, 3/27/2015

Michael Reynal, portfolio manager at the $287 million RS Emerging Markets Fund (GBEMX) puts it this way: “Politics are ruining a good investment story in Brazil.”

It has oil. It’s the No. 1 orange juice exporter, coffee exporter, sugar exporter, iron ore exporter, beef exporter and the No. 2 soybean exporter. It has a diverse economy and strong banks. It has a growing consumer class and they’re constantly aching to spend like crazy North Americans. Nobody cares.

A colossal corruption scandal involving Petrobras and the ruling Workers’ Party has hundreds of thousands protesting in the streets. Two weeks ago, some of them even called for impeachment. And this week, a polling firm called MDA showed that more than 59% of respondents think president Dilma Rousseff should be impeached.

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